Innovation Isn’t Just a Buzzword

It’s rather unfortunate that everything has to be an innovation these days. Even worse, is that for a business to be effective, it seems they must drive disruptive innovations. Innovations are simply inventions that have been successful in the market, those inventions might actually business model changes that have been successful in penetrating the market. I personally find that looking at innovation as a framework to analyze business pressure to be extremely interesting. I did this today in an interview and it felt really good as I was able to create context around changes impacting the health insurance industry.

Several years ago I wrote about the 4 types of innovation, Incremental, Modular, Architectural, and Radical. This is a bit different than the framework that Christenson argues, since he only looks at 2 types, Incremental and Disruptive. I believe that disruptive encapsulates both Architectural and Radical. Architectural changes are business model innovations while making a very similar product but one that significantly undercuts existing businesses or creates a new market. While Radical innovations creates a new market but also attacks existing customers, through a new business model and a completely different type of product. Think of a fan competing against an air conditioner window unit, while central air is an architectural change for the window unit.

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I believe that this framework is just as useful for businesses to analyze their environment as Porter’s 5 Forces┬ábecause it forces businesses to confront the disruptive innovations that they might have overlooked otherwise. Without using this framework it is likely that businesses would ignore the new entrants force as they don’t feel that those businesses will ever compete with them. However, based on historic evidence those entrants that have a different business models or a different metrics for their performance eventually supplant incumbents. I believe that this type of analysis should be conducted annually or bianually as many industries and markets have continually increasing uncertainty and faster rates of change than historically.

HR, Recruiting, and Candidates

I read a well intentioned post on LinkedIn today that really got me thinking about the recruiting process. This being near and dear to my heart since I’m going through the process of finding a new job. While at my last job I was fortunate enough to be both a hiring manager for 2 employees and involved in the hiring process for 5 positions that would not be reporting to me. Discussing with my manager the different requirements for positions he and I aligned on one thing, we wanted the best person regardless of how they looked on paper. In many cases this directly conflicted with the requirements of HR since the salary bands the employees we were hiring for required degrees or certifications.

For example one of the Business Analysts we decided to hire didn’t have a college degree, but because of the salary band required to get high quality candidates we had to have a college degree as a requirement, even though we didn’t believe it was truly a requirement. This BA turned out a better hire than one of the other BAs that had a college degree and a great deal of BA experience. Another perfect is example is the face that one of my hires was “required” to have a nursing certification to earn the pay band we knew was required to find a highly qualified candidate. I had to fight HR and argued it wasn’t truly required for the position. I eventually won and the person I hired worked out amazingly well and in fact is more highly regarded than his counter part that has that certification. Finally, one of our POs for the product had neither certification nor college degree. He has done extremely well without those certifications – granted he earned a certification and a great deal of trial by fire experience, but he started out strong because of his business experience.

These are just examples from my personal experience. This is ignoring the number of great people that have become famous despite their credentials that would have had them relegated to the dust bin in less than 6 seconds by the recruiter above. If this is the best system our current Recruiting and HR experts have developed, it’s a deeply flawed system that needs some serious rework. Finding the right candidate is difficult. It requires team work between HR, Recruiting, and the Hiring Manager. These conversations and dissociation of salary and degree requirements from applications will likely reverse the trend of college degrees required for every position. I think our thought leaders in Recruiting and HR need to do better, the article above indicates there’s a great deal of waste and non-value added activity in the vetting process because a good fit that is excluded after 6 seconds is a defect and any candidate that looks good on paper but is clearly a bad fit is also a defect to the process.

The hiring process is extremely expensive as is the onboarding and training of a new hire. Any clear poor fit from the start indicates there defects and waste in the hiring process that need to be addressed. Bragging about a 6 second “review process” isn’t the right thing to be doing, figuring out how to fix the process to ensure that the right people are hired the first time at the right time should be the goal of recruiting.

Legacies and Self Reflection

Last night while listening to Pandora, Fall Out Boy’s “Centuries” came on, not a huge fan of the song, but it got me thinking about how difficult it is to be remembered for “Centuries.” Even 100 years after a person’s death is impressive. Considering the fact that most people if asked who the richest person ever is, they wouldn’t come up with John D. Rockefeller even though his legacy is likely to last more than 100 years.

This made me think about my legacy at the companies I’ve worked. Once you leave a company having a positive legacy for years to come is difficult unless you implemented a major project or new product. This is important to me considering I’m going through a “Career Transition” according to my previous company. My last day is on Friday the 13th, because I’m being laid off. At my previous company my only real lasting legacy will be the impact of the process improvement training program and my help on the new medical management system. The latter will likely not be a long lasting legacy, while the former might last as long as the people I trained.

I am being let go because my organization didn’t prioritize process improvement, so my position was eliminated to make room for higher priority employees. It happens, i’m disappointed because we were just getting our program off the ground. We had several completed Kaizen events and one of them is up for a Blues Innovation award. I’m excited to have made that much of an impact so quickly with my student’s work and jobs. I believe that my students will continue to thrive and make significant changes to the organization using the skills I taught them.

I hope that my previous job’s legacy for me is to have learned from what I did well and did poorly at the organization. I know I was far from perfect and have room for improvement. I believe I can and will improve and that I will end up in a better position because of my experience at this job.

Big Data is Coming to Get You

Big data is what high tech companies are calling collecting massive amounts of data about their users. For Google, this includes all the trips you’ve taken, the places you’ve driven, where you’ve driven, your email (if you use Gmail), your searches, Google Now preferences, articles you’e posted to Google+, your pictures, and the list goes on. The idea is to use algorithms to mine this data for useful tidbits about user habits so products and services can be recommended just as you need it. These data can tell companies a great deal about the user including who their friends are.

However, what isn’t clear is who owns the data. Companies assume they own the data, which because you agreed to their terms of service, is true, even though you didn’t read them. However, with the recent re-categorization of fitness apps and trackers at medical devices a wrench has been thrown in the works. Data associated with Medical Devices is typically assumed to be Personal Health Information, which is protected under HIPAA. Which means that companies can’t really sell them AND that you are able to control what happens with the data. It’s the reason why doctors are required to share information with other healthcare professionals.

I believe that this is just the first step towards making our data more portable. In Europe you can already request a transcript of all the data Facebook collects of you, however they do not say you have control over what FB does with that data. Obama, is pushing to help increase privacy of personal information, but will only work if the companies feel like they have a stake or a penalty if they do not adequately protect data. Whenever they are an effective monopoly such as Apple or Google is of your data (through lock-in effects) their incentives to fully respective privacy is reduced because of the cost of switching to another monopoly.

Restrictions Can Drive Innovation

As a Lean process improvement guy as well as someone that really loves reading about innovation I’ve always taught my students that regulations, limitations, and restrictions on processes, equipment, and activities offer us an opportunity to innovate around those rules. The way that I describe it is that rules place you in a box, but within that box you can move up and down and diagonal and develop some really interesting ideas because of what you can’t do. However, you don’t focus on what you can’t do as much as focusing on how you can avoid that and what you CAN do.

I saw a picture to a great discussion about how gluten free diets are forcing, at least one chef, to be more innovative in their cooking. I’d post it, but the image is so large it’d take up the entire post, so I linked it above. Essentially the chef had a dish with polenta on it and a base that was all glutenous flour, but he figured out a way to make it all polenta, which actually created a unique dining experience that he felt offered a superior taste.

Another area where regulation has been the root of many innovation is the financial sector. They complain the most about regulations because it’s “bad for the economy” or something like that. However, CDO’s and everything that caused the last collapse was in response TO regulations. They figured out how to work around the regulations and make even more money than before. In fact, many banks started to follow suit because they weren’t able to post as high of profits and were getting hit by Wall Street for under performing comparatively.

This is one of the reasons why I personally don’t see value in fighting regulation other than to shape it in one direction or the other. The companies that are able to exploit the regulation the best are going to end up being first to market or extremely fast followers. Meaning they will make a great deal of money and likely dominate the market. If you look at regulation as a “disruptor” and an opportunity to disrupt the regulation, you’re going to do really well as a business.